Philanthropy becomes popular in S.Africa - CNBC Africa

Philanthropy becomes popular in S.Africa

Southern Africa

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Philanthropic activities on the rise in South Africa.

According to Nedbank Private Wealth’s Giving Report for 2010, 93.5 per cent of South Africa’s high net worth individuals are donating funds to social causes. While this figure is positive, there is still room for improvement in terms of these individuals working on a structured philanthropic budget.

“The United States market has over 1 million registered trusts or foundations, which definitely tells us they are more strategic in their giving. They look at sustainable giving for the long term which is what we try to encourage in South Africa,” Noxolo Hlongwane, philanthropy specialist at Nedbank Private Wealth told CNBC Africa on Thursday.

According to Hlongwane, the US currently has the biggest and most established market for philanthropic activities which accounts for a total 2.2 per cent of the country’s Gross Domestic Product (GDP) growth rate.

She explained that the philanthropic structure is one that treats the cause of a crisis or issue and not just the symptoms. In other words, it addresses an issue for the long term in order to prevent it from worsening or reoccurring.

In addition, one needs to set aside a budget as well as possibly committing funds upfront or creating a separate legal entity such as a trust or charitable foundation to carry out philanthropic activities.  


On the other hand, a total 60 per cent of South African philanthropists don’t work on a giving strategy however, with recent documenting and studies being conducted within the country, change is on the way.

“The findings of our studies showed that most of South Africa's high net worth individuals don’t have a budget or strategy for their giving so we’re still seeing ad hoc giving based on emotional responses to a crisis or distress but we are trying to get individuals to become more strategic and are slowly seeing a change," said Hlongwane.

The notion that international philanthropists always focus on donating to African causes is also beginning to change as more African philanthropists begin to get involved.

These African individuals don’t only come from the upper class but middle income groups are also embarking on giving activities.

“In Africa, the belief of giving is embedded in our culture. Work and documents are coming out and giving us more information in terms of how low wealth communities are giving which we call horizontal philanthropy,” she concluded.

“It’s a trend that has always been around but it is something that we are now able to document and have evidence of.”